HONO ZORG MARRGUN QUHENTA
The Export Credits Guarantee Department hes offered to guarantee a loan to the Hong Kong Creep Karbour Tunnel Company Limited of £12.5m. zepayahlé over 10 years. This is 75% of the cost of the proposed tunnel. Shie offer is, however, oubject
to the debt being jointly end aoverally guaranteed by the shareholders of the company (including, it de understood, the Hong Kong Government).
Such a DI***
entce -- joint as well as several is required do
mo
security that the loan will be repaid whether or not the tunnel proves a financial success.
This is
normal. In the absence of such a guarantee E.C.C.D. would be in effect being asked to insure the risk of the project failing to earn sufficient revenue to defrry the costs of construction.
This is a Tiai
appropriate to the equity ehareholders; it is bertainly not 2.C.G.D.'s function to insure ruch riske. It is also necosnery, and is a norial requiro- ment in projects of this nature, that the Government or the Central Bank of the country concerned should
give its guarantee of repayment of the debt.